ECO 550 Assignment 3: Long-Term Investment Decisions
Assignment 3: Long-Term Investment Decisions
Due Week 9 and worth 300 points
Assume that the low-calorie microwavable food company from Assignments 1 and 2 wants to expand and
has to make some long-term capital budgeting decisions.
Use the Internet and Strayer databases to research government policies and regulation.
Write a six to eight (6-8) page paper in which you:
1. Outline a plan that managers in the low-calorie microwaveable food company could follow when
selecting pricing strategies for making their products as inelastic as possible. Provide a rationale
for your response.
2. Examine the major effects that government policies have on production and employment. Predict
the potential effects that government policies could have on your company.
3. Determine whether or not government regulation to ensure fairness in the low-calorie
microwavable food industry is needed. Cite the major reasons for government involvement in a
market economy. Provide two (2) examples of government involvement in a similar market
economy to support your response.
4. Examine the major complexities that would arise under expansion via capital projects. Propose
key actions that the company could take in order to prevent or address these complexities.
5. Suggest the substantive manner in which the company could create a convergence between the
interests of stockholders and managers. Indicate the most likely impact to profitability of such a
convergence. Provide two (2) examples of instances that support your response.
6. Use at least five (5) quality academic resources in this assignment. Note: Wikipedia does not
qualify as an academic resource.
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